Mike Capps on an immature business, the right time to make a Vita game and why he's scared to reveal new IP

In this exclusive interview conducted at Game Connection this week, Epic president Mike Capps talks openly about the need for the games business to mature by sharing content and information, why the company is support the PlayStation Vita with its Unreal engine but not making its own game, and the worry of revealing new IP.

Q:
In your talk at Game Connection this week there seemed to be a strong emphasis on the welfare of the staff, which given the recent email leaks and horror stories from other companies, seems rare?

Mike Capps:
It broke my heart when someone misreported our hours at Epic and suddenly we were the bad guys, we don't have one per cent turnover of staff a year because we're mean and terrible. All my friends work at Epic, it's my entire social life. My best man works at Epic. To call it family is a little cheesy but that really is true.

Q:
Is that approach because it works for you from a financial point of view, or do the finances make sacrifices for that? What are you doing that those other companies aren't?

Mike Capps:
It's an easy thing to do, to look at a project and say "well we said we were going to ship this day and we must because otherwise Wall Street will cut our price in half if we don't ship." So then you're looking at do we push these people this hard or miss, and you know, a lot of folks get hurt if our company loses half its value, so which one's worse? I'm really glad I don't have to make those sorts of decisions.

And also since I've been an Epic, ten years, we've been profitable, knock on wood. And that makes it easier to say we'll have free soda all the time and bring in dinner if we're working late, you have the money to do that. We haven't had to test where the line is drawn when you don't have the money to buy soda. Maybe it makes it a lot easier to be really nice to everyone.

There's a lot of kids driving fancy cars at Epic who have only been there a couple of years, and that's because we've been very successful, we have great fans, and then we give the money to the employees

And I think Tim founded the company on that principle of, he's just really, really fair. For a majority owner of a company who could take a significant portion of the profits - there's a lot of kids driving fancy cars at Epic who have only been there a couple of years. Literally programmers that have been there for four years driving around Italian cars, and that's because we get lucky, we've been very successful, we have great fans, and then we give the money to the employees. He doesn't have to do that, he could do half and nobody would notice and they would think it was really great, and he does it because it's fair.

Q:
You're here talking this week about that sort of strategy, why is it important to you to do that. Is it just because you have an engine to sell?

Mike Capps:
It's one of our values. There's a lot of different parts to it. We get really involved in the Supreme Court defence for games, for example, because we want games to successful, we're total game nerds. And when NVidia is saying "we're trying to decide whether to put X transistors or 2X" we're like "2X, everyone needs 2X! Here's why, look what we can do with 2X." And we did the same thing with Microsoft guys and the Xbox quite famously, cost them a billion bucks or something like that for extra memory, and I think it was the right thing for the gamers and for them.

So we do a lot of pushing. And our games industry is shockingly immature from a business perspective, because so few folks have business experience before coming in, or an education for business. It's awesome because it's entrepreneurship gone right, that's what our industry comes from, and that's really exciting, but there's not a lot of sharing, there's not a lot of great game business 'how to' books, so we try to share and people listen to us, for some reason, and we try to learn as much as we can from everybody else and their mistakes. It just seemed like the right thing to do.

Q:
How do you balance that commitment with creating and maintaining an engine, and your own IPs?

Mike Capps:
They're very complementary, to make the games we make and have the ownership of our IPs and to have clarity of vision on our products, because we have that engine business. Every game company is one bad game away from going out of business unfortunately, and we're three away. Which is awesome, and hopefully we won't have three in a row, but we could survive Gears not selling and it would be OK and we'd try again. And so it's very complementary, and from a technology standpoint it's entirely complementary.

It's difficult for us when we make the decision how do we provide support to licensees when we're in the middle of shipping a game, but we have to, because we said we would. Heck, we don't even say we will, but we do more than we ever put in any contract because that could be us in the middle of shipping our game, so it's a little do unto others...

I was licensee, I shipped the first Unreal Engine 2 game, and a lot of my programmers were licensees, because they really know the tools and then made their way to Epic because they thought it would be fun to make the tools better. So we kind of understand what it's like to be on the other side, and that helps up a lot to balance it.

And then for support we have lots of techniques and tricks to make sure that it scales very well. We don't do one-on-one meetings with all our licensees all the time, we do lots of forum style stuff so it's very easy to communicate.

Every game company is one bad game away from going out of business

Q:
And those licensees help each other out on the forums?

Mike Capps:
Absolutely. When I was a licensee probably half the questions were answered by other licensees because you're all in it together. There's no reason, if you find a bug, you don't go "ha ha ha, that'll give us an edge on Splinter Cell!" Because it doesn't at all and so you share it, because it's one less thing that Epic has to find and fix and they can focus on something you care more about. And you share with the Mass Effect guys and they share with you.

I love that about middleware just in general. We use a lot of middleware, not just our engine, but we license ten or fifteen, because it lets us all do better stuff. We're not all reinventing the wheel and designing a car engine to get some place, we buy a car and then go. And that let's us do so much more. Not everybody can build a fantastic physics engine. I think we might be able to, if we worked really hard, but why don't we just take that good free one? That sounds way better. And then let's focus on physics interaction with players and that fun stuff.

Q:
You also seem open to new devices, is there ever a time you look at a device and think 'no'?

Mike Capps:
Oh yeah, definitely. We've got a lot of different axis when we look at something like that, it's very exciting for us to be early on the platform with technology, so we were the first ever demo on PS3 for example, and that was really important to us because I'm still saying it six years later, so clearly I thought that was a really cool thing to do.

But that's very different from saying we're going to do a launch title, which would be huge support, but costly in terms of poor install base on the platform. Not that they did a bad job, it's just the first year is always bad, it's always hard, and so we just prefer to wait. And with Xbox we shipped a year after it came out and had a better install base. So it's kind of a question of showing up for the tech demos, do we get our engine up and running and do we ship a game and fully support that platform? It's a broad range of options.

For example we're not currently making a Vita game, I'm not sure how well it's going to be accepted in our Western market which is primarily where our games sell. It's a really cool platform, but I have a phone, and it's really hard to compete with that. So I'm not sure if it will be successful or not, I hope they are, it's good for the games industry, but we got our tech on it really early. We were, I think, one of the very first people to get one and work with it and we were on stage at the launch, because we have a lot of licensees who are curious about it and so we did the first part. But we can't really fully support that platform unless we're shipping our own games, that's how we know we know that platform, and it's really important for us to do that. And so with Vita we're not planning on shipping a game and so that means we're pretty honest with folks and say "you can have the Vita code we've got but this is not the same as us having shipped on Xbox or iPhone." It's the same business decision I think that anybody makes, is this a platform for me?

We're not currently making a Vita game, I'm not sure how well it's going to be accepted in our Western market which is primarily where our games sell

Q:
Ubisoft suggested that now for each new IP it has to have a game for every platform, is that the way to go?

Mike Capps:
No. It's easy to do if you're 850 people on a title I guess. It's great to have that, I suppose if you're smart about it, having the potential is different than saying we're going to do it. When we think about our IP we care a lot about having the ability to make action figures, because it's a good way to tell, if there's no action figure then there's no character, there's no monsters that stand out, what's cool about this IP then? How could it be a movie? How could it be a comic book as well? But that doesn't mean we go and make action figures and comic books. But my god, if you make World Of Warcraft and you also have to have an Xbox version, you won't ship World Of Warcraft. And there's a lot of great entertainment that's a really good fit for the phone, but, Infinity Blade on the Xbox? Maybe it would be cool with Kinect, but I think it's great where it is.

And then you get port-itis, which really irritates the hell out of, well, you pick! PC gamers hate it, console gamers hate it.

Q:
You're showing a new IP at the VGAs on Saturday, can you tell me anything about it?

Mike Capps:
It's something radically different for us. New IP, new game. We're not really talking much about platform or anything like that, but I mentioned at GDCE Europe and my keynote there that we were working on a lot of new projects, and it's been really refreshing to the team to try some new things. We love Gears, it was a great trilogy, we've gotten a lot of great compliments and a lot of great fans, and we're still supporting Gears 3 very strongly, but I've got guys that have been on it since 2001, and some of them need a break and to try something new.

So this is going to be one of those projects where we try something totally different, and it just went 'boom', because everyone had this pent up energy to do something new. And I can't wait for them to get back to something like Gears in the future, because it's sort of our bread and butter, and they're going to be more energised for it to.

Q:
So are those fans going to be freaked out or will they look at it and recognise it as an Epic product?

Mike Capps:
We're scared to death of both. I'm so scared that people will just say "oh yeah, that looks like an Epic game, oh sure" because I want them to see it as a departure, but I don't want anyone to say "that doesn't look anything like an Epic game, forget it, I'm not interested." So we're actually nervous, we haven't been nervous like this for a while!

I'm nervous, this is something I pushed for a lot and I wrote some of the script for the trailer and if everyone hates it that's it, I'm out of games for a while. (Laughs)

We love Gears, it was a great trilogy, but I've got guys that have been on it since 2001, and some of them need a break

Q:
So what's happening for Epic in 2012? Are you expecting any big changes in the industry?

Mike Capps:
Watching what happened to Zynga I think is going to be good for everyone. I feel sorry for the folks at Zynga who were looking for the $20 billion dollar IPO but are now down to $7 billion or something, and that was in a week, I think that's useful in that it's sort of burst the bubble already, which is great to bring you back to what's successful about Zynga as a business model and as a gaming company, and think about that rather than "rah rah, social!"

From Epic's perspective we'll have made some big announcements in technology, which will be exciting, at least one new IP that we'll be announcing, and I like to think we'll have shipped something new by this time next year as well. We'll see though.

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